Clydeport Properties Limited V. Shell Uk Limited
| Jurisdiction | Scotland |
| Judge | Lord Glennie |
| Neutral Citation | [2007] CSOH 92 |
| Court | Court of Session |
| Published date | 31 May 2007 |
| Year | 2007 |
| Docket Number | CA12/07 |
| Date | 31 May 2007 |
| OUTER HOUSE, COURT OF SESSION [2007] CSOH 92 | |
| CA12/07 | OPINION OF LORD GLENNIE in the cause CLYDEPORT PROPERTIES LIMITED Pursuers; against SHELL UK LIMITED Defenders: ________________ |
Pursuers: Connal QC, Solicitor Advocate; McGrigors
Defenders: Haywood, Solicitor Advocate; Biggart Baillie
31 May 2007
Introduction[1] By a lease dated 9 and 14 November 1988, the pursuers leased to the defenders premises known as Ardrossan Harbour, Ardrossan. It is the pursuers' case that the defenders purported to terminate the lease as at 11 November 1990 but that, thereafter, they remained in occupation of the premises and continued to make payment of rent in terms of the lease. In those circumstances, they contend that the lease continued after 11 November 1990 by operation of tacit relocation. In the alternative, the pursuers contend that by virtue of certain correspondence passing between the parties in the early 1992, the parties entered into a new lease on substantially the same terms as were contained in original lease. The defenders deny that the original lease extended beyond 11 November 1990 whether by tacit relocation or otherwise. They also deny that there was any new lease brought into being by the correspondence in the early 1992 or the subsequent actings of the parties.
[2] In the Summons, the pursuers put forward a number of claims. In addition to a claim for rent allegedly due from 2003 to the present day, reflected in Conclusion 7, there are claims relating to "remediation" of the premises. These fall into two distinct categories. The first is a claim for implement. This is reflected in Conclusion 6, which is in the following terms:
"for decree ordaining the Defender to implement its obligation to carry out the works specified in the Schedule of Remediation, prepared by EnviroCentre Limited, dated November 2006 within the reasonable period of 12 months or such other period as the court may direct from the date of decree to follow hereon; failing implement for payment by the Defender to the Pursuer of the sum of SIX MILLION EIGHT HUNDRED AND FIFTEEN THOUSAND POUNDS STERLING (£6,815,000) with interest at the rate of 8% per annum from date of citation hereof or such other date as the Court thinks fit until payment;"
The obligation of which implement is sought is contained in clauses FOURTH and TENTH of the Lease, to which I shall refer in due course. The second category of such claims is reflected in the terms of Conclusions 8, 9 and 10. Those Conclusions claim payment of, respectively, £74,165.42, £576,804.35 and £36,594.98. They are supported by averments in Articles 6, 7 and 8, in which the pursuers complain of contamination to the premises which, they say, was the responsibility of the defenders and by reason of which they contend that they have suffered damage.
[3] In their Defences, the defenders take two points which are relevant to the present debate. The first is that clause FOURTH of the Lease ceased to have application after termination of the Lease. The second is that, esto clause FOURTH of the Lease has application after termination, any obligation thereunder has prescribed in terms of section 6 of the Prescription and Limitation (Scotland) Act 1973.
[4] The matter first came before the court at a Preliminary Hearing on 30 April 2007. At that Preliminary Hearing, Ms. Motion, solicitor advocate for the pursuers, submitted that the prescription point raised by the defenders gave rise to a short point of law. Her contention was that the claim for remediation and the claims for damages (though not the claim for rent) were claims to enforce an "obligation relating to land" falling within paragraph 2(e) of Schedule 1 to the Prescription and Limitation (Scotland) Act 1973; and were therefore subject to the long negative prescription rather than the five-year prescriptive period. She submitted that this point could, with advantage, he resolved at debate. The reasoning which she advanced was set out subsequently in a Note of Argument for the pursuers lodged in process. I quote from paragraphs 1.3 to 1.5 of that Note of Argument:
"1.3 The pursuer's primary position in terms of the summons is of course that the 1988 Lease ... continues by tacit relocation, the defender being barred from objecting to that plea. The pursuer's case is that even if the 1988 Lease was validly terminated, a new lease in broadly the same terms, and with specifically the same obligations of repair, was entered into between the parties as evidenced by the change of letters in early 1992. If the pursuer is right on either of those hypotheses no issue of prescription would arise. However in order to prove either of those hypotheses it would be necessary to embark upon a potentially lengthy and inevitably expensive proof with evidence being led relating to conduct and exchanges between the parties dating back over a significant period.
1.4 This would similarly apply to arguments that the pursuer would seek to advance in relation to the defender having relevantly acknowledged the main claim; it is anticipated that this would be a matter in relation to which the pursuer would be put to proof.
1.5 The importance of the long negative prescription point however is that the pursuers position is that even if the 1988 Lease was validly terminated and there was no new lease agreed (which is the argument advanced in the defences) the obligations requiring the defender to remediate are subject to long negative prescription, and still are still enforceable by the pursuer up to twenty years after the 1988 Lease was terminated - which on the defenders argument was November 1990."
It was said that if the court found for the pursuer in relation to this issue, there would be no requirement (save in relation to the claim for rent, which in the context of the other claims was relatively minor) to consider or determine the question whether the 1988 Lease continued or whether a new lease came into existence. The claims for implement and damages could be disposed of on the basis of evidence and arguments as to causation and quantum.
[5] After some discussion at the Preliminary Hearing, Mr Haywood, solicitor advocate for the defenders, agreed that a debate on this point might cut through some of the issues in dispute between the parties, albeit that on any view the claim for rent would remain outstanding. Accordingly, notwithstanding that neither party had adjusted its pleadings to focus the particular issue, I appointed the matter to debate and was able to fix that debate to take place on the first day of the following week, namely 10 May 2007.
[6] Parties exchanged Notes of Argument before the debate took place. In his Note of Argument for the defender, Mr Haywood raised an additional point. The debate proceeded upon the assumption that the Lease terminated in 1990; and that there was no new lease. On this hypothesis, he submitted, the pursuer's Conclusion for implement was not competent. At the hearing on 10 May 2007, Mr Connal QC, who appeared for the pursuers, agreed that the competency point could also be included within the debate.
The relevant terms of the Lease[7] The clauses of the Lease relied upon by the pursuers are clauses FOURTH and TENTH. In terms of clause FOURTH, the defenders, as tenants, "blind and oblige themselves" to do a number of things, including
(Six) to maintain the subjects and in particular the walls and fences enclosing the same and all of the Tenants' of property thereon, the said access road, the said weighbridge and office, the said Switch House No.1and the oil supply pipes, water supply pipes, underground drainage system and interceptors and conductors for telephone cables and electric cables serving the subjects or used in connection with the subjects always in a good and safe condition and repair ..."
Clause TENTH provides as follows:
"At the expiration or sooner termination of this lease as herein provided the Tenants shall be entitled either to remove the installations and other property belonging to them from the subjects with the exception of all concrete brick or stone built buildings and walls and all boundary fences or to leave the said installations and other property in position. In either event, the Tenants shall leave the subjects in a reasonable state of repair and neat and tidy and shall make the subjects safe all to the satisfaction of the Landlords."
I shall refer to these clauses respectively as the "maintaining" and "terminal" conditions. It should be observed that the pursuers in their Summons rely only upon the maintaining conditions in Clause FOURTH. However, Mr Connal told me - and it was, in the event, obvious - that the pursuers intended also to rely upon the terminal conditions in Clause TENTH. With the agreement of Mr Haywood, the debate proceeded on the basis that both clauses required to be considered; and that, if necessary, the pleadings could be tidied up afterwards.
Prescription - the statutory framework[8] Section 6 of the Prescription and Limitation (Scotland) Act 1973 lays down a five year prescriptive period for certain obligations to which that section applies. Those obligations are defined in Schedule 1. Section 7 of the Act provides, with certain exceptions, for a twenty year prescriptive period. That twenty year period applies inter alia to obligations which are within section 6; and, in respect of such obligations, it acts as a "long stop". Accordingly, the question at issue in the present case is not strictly whether the obligations which the pursuer seeks to enforce are obligations to which the long negative prescription of twenty years applies. More accurately, it is whether those obligations are also subject to the five year prescriptive period laid down in section 6.
[9] Schedule 1 comprises two paragraphs. Paragraph 1 states that "subject to paragraph 2", section 6 applies to the obligations defined in subparagraphs thereunder. Paragraph 2...
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